On Remand for Resentencing Without Specific Instructions, District Court May Consider Any New Evidence from Either Party Relevant to Issues Appealed

Let's say a defendant successfully appeals his sentence. What's in play on remand? As it turns out, this has been something of an open question in the Fifth Circuit: "This Court has not precisely stated what is proper for the district court to consider on remand absent a specific mandate." So it does so here:

It is important that the sentencing judge have sufficient information to mete out a fair sentence, but reconsidering all sentencing factors de novo on remand is unreasonable due to the passage of time and logistical considerations. In the absence of a specific mandate and in the interest of truth and fair sentencing, the district court may consider any corrections and additions relevant to the issues addressed by this Court on appeal. Therefore, when the case is remanded for resentencing without specific instructions, the district court should consider any new evidence from either party relevant to the issues raised on appeal. This Court may still, however, mandate a particular result or limit consideration to only particular evidence on remand when it is prudent to do so, and the district court would be bound under the law-of-the-case doctrine.

So how might that play out? Carales pleaded guilty to illegal reentry. At his first sentencing, he got an 8-level aggravated felony enhancement for a prior Texas conviction for delivery of cocaine. He appealed, arguing that the evidence did not exclude the possibility that the conviction could have been based on an offer to sell cocaine (which, prior to a 2008 amendment, was not "drug trafficking" under §2L1.2). The government conceded the error, and the court of appeals vacated and remanded for resentencing. On the second go 'round, the government offered Carales's judicial confession from the prior offense, which evidently showed that he committed the offense in a way that fit the §2L1.2 drug-trafficking definition. Carales appealed a second time, arguing that the government's concession in the first appealed barred it from offering any additional evidence concerning the prior conviction at the second sentencing. That would leave him exposed to, at most, a 4-level "any other felony" enhancement under §2L1.2.

The result:

This Court’s opinion [in the first appeal] vacated the sentence and remanded for resentencing because “the sentence enhancement was erroneous.” Id. It did not provide a clear indication that the government conceded that only a four-level enhancement should apply. Nor did the opinion purport to limit the ability of either party to present or the district court to consider other evidence on remand bearing on the issue of whether Carales’s prior offense was an aggravated felony because it involved actual possession of cocaine. Carales had equal opportunity to present any new evidence to the district court contrary to the judicial confession in support of his contention that the Texas conviction was not an aggravated felony. Accordingly, the district court properly considered the judicial confession in its sentence calculations on remand because it was relevant to the issue appealed.

Rains confronts what is surprisingly a question of first impression for the court. In fact, only one other circuit has addressed it in a published opinion. That question is whether a § 924(c) conviction is a "felony drug offense" for purposes of the enhanced penalties in 21 U.S.C. § 841. Which means we'll have to look at statutory language.

"Felony drug offense" is defined, for purposes of the Controlled Substances Act, in 21 U.S.C. § 802(44). It is

an offense that is punishable by imprisonment for more than one year under any law of the United States or of a State or foreign country that prohibits or restricts conduct relating to narcotic drugs, marihuana, anabolic steroids, or depressant or stimulant substances.

And § 924(c) provides that

any person who, during and in relation to any crime of violence or drug trafficking crime . . . uses or carries a firearm, or who, in furtherance of any such crime, possesses a firearm, shall, in addition to the punishment provided for such crime of violence or drug trafficking crime [be subject to additional penalties for violation of this section].

(alterations in Rains). "The issue is whether § 924(c) qualifies as a 'law . . . that prohibits or restricts conduct relating to [drugs].'"

In a split decision, the Fourth Circuit "held that § 924(c) could be the basis for the enhancement, at least when the record made clear the conviction involved a drug trafficking crime rather than a crime of violence." The dissent in that case "focused on § 802(44)’s use of the word 'law,' and concluded that an examination of the documents of conviction was inappropriate: a law either does or does not prohibit drug related conduct, and § 924(c), at least in some circumstances, does not." For that reason, the dissent argued, § 924(c) is not a "felony drug offense."

Rains concludes that the answer is controlled by an earlier Fifth Circuit decision, United States v. Curry, which applied the Taylor/Shepard approach to determine whether a state conviction for possessing of contraband in a state prison was a "felony drug offense." The state statute covered a variety of contraband, including drugs. "Curry establishes that it is permissible to apply the enhancement even when the statute of conviction covers non-drug related conduct so long as the record makes clear the actual violation involved drugs." And so it is with § 924(c):

In conclusion, we join the Fourth Circuit in holding that § 924(c) can be the basis for an enhancement under § 841(b)(1) when the record makes clear that the conviction involved a drug trafficking crime rather than a crime of violence.

Recoginizing one potentially deleterious implication of this holding, the court ended the discussion with this important footnote:

We are concerned that this decision could be read to support a double enhancement when the same underlying conduct gives rise to both a substantive drug offense and a § 924(c) conviction for possession of a firearm in furtherance of a drug trafficking crime. At oral argument, the government indicated it would not pursue a double enhancement under these circumstances. Although we take the government at its word, we also want to be clear that it is not our intention to authorize such a double enhancement.

Monday, August 16, 2010

Government Failed to Prove That Defendant Used "Counterfeit Mark" on Containers of Allegedly Counterfeit Drugs

You may not find yourself handling many counterfeit drug cases, but there's still a broader lesson to be learned from Xu: even if there's a simple, straightforward way for the Government to establish an easily provable element of an offense, the Government can still screw it up. So keep on your toes.

Xu was convicted at trial of several counts involving counterfeit drugs. He appealed his conviction on one count of trafficking in counterfeit goods, specifically Zyprexa. One element of that offense, 18 U.S.C. § 2320, is that "the defendant used a counterfeit mark." And "[u]nder the statute, a 'counterfeit mark' must be 'identical with, or substantially indistinguishable from, a mark registered on the principal register in the United States Patent and Trademark Office ['USPTO'] and in use.'"

Typically, the Government will prove that element with a certified copy of the certificate of registration. For whatever reason, the Government did not do that here. What did it offer? "[A] number of exhibits of the allegedly conterfeit Zyprexa, but not samples of the original, authentic drug from which a jury could infer trademark registration."

The Government also offered the testimony of an employee of Zyprexa's manufacturer, who tested samples of the allegedly counterfeit Zyprexa. "Although the employee referred to the Zyprexa as 'counterfeit' and explained how the samples obtained from Xu differed from the drug produced by Eli Lilly, he never stated that Zyprexa was a mark registered on the USPTO’s principal register, as required to meet the definition of 'counterfeit' under 18 U.S.C. § 2320(e)(1)(A)(ii)."

The employee also testified that "the 'little symbol that's next to Zyprexa' on one of the allegedly counterfeit containers of the medication" was "the 'registered trademark symbol.'" Not good enough, for two reasons. First, there was no evidence that the same mark appeared on genuine containers of Zyprexa. Second, there is more than one trademark registry, and the employee's reference to the "registered" symbol "did nothing to establish that the mark was listed on the principal register, as opposed to being registered in some other manner."

Finally, testimony "that the potency of each Zyprexa tablet is a 'registered commitment'" failed to carry the day, because did not "show that a 'registered commitment' has anything to do with registration on the USPTO's principal register, as aopposed to simply some form of FDA requirement[.]"

Thus, the evidence was insufficient to support Xu's conviction on that count, and the court vacated it.

Thursday, August 12, 2010

Border Search Doctrine Applies As Long as International Border Has Been Crossed, Regardless of Where Travel Originated

United States v. Pickett, 598 F.3d 231 (5th Cir. 2010) (per curiam) (Clement, Prado, Elrod) [I haven't included a hyperlink to the opinion because it doesn't appear to available on the opinions page at the Fifth Circuit's website.]

Now here's an interesting case.

Recall our old friend (or nemesis) the border search doctrine. Routine searches at the border are per se reasonable, and do not require any level of objectively reasonable suspicion, much less a warrant. That's because of the sovereign's inherent authority to protect its "territorial integrity," as the Supreme Court put it in United States v. Flores-Montano. But exactly when does it apply? That's the question raised by Pickett.

Pickett worked "at an oil and gas production site thirty miles off the coast of Louisiana in international waters." ICE agents got wind that he had recently subscribed to child pornography websites. He returned to Venice, Louisana several months later, sailing through international waters on the way. ICE agents were there to meet him. "The agents relied on the border search exception to view the contents of Pickett's thumb drives, portable hard drives, and laptop memory card[, . . . ] which revealed several images of child pornography." Pickett later waived his Miranda rights and admitted to downloading the porn. "[T]he agents [then] obtained a warrant for a more intrusive search and eventually found several hundred illegal images and videos."

Pickett moved to suppress all the porn and his statements as fruits of a warrantless search. He argued that the border search doctrine did not apply, "on the theory that his voyage to shore involved 'no border crossing,' because it allegedly originated from a 'federal enclave.'" Pickett argued that the production site he at which he was working "was a 'federal enclave' under the Outer Continental Shelf Lands Act ('OCSLA'), which extends adjacent state law as adopted federal law to the 'subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon.'" The district judge denied the motion without reaching the OCSLA argument, concluding that Pickett's travel across the border from international waters was sufficient to trigger the border search doctrine.

The court of appeals affirmed, but divided on the reasoning. The majority held that Pickett's argument was foreclosed by the court's decision in United States v. Stone, 659 F.2d 569 (5th Cir. 1981). "In Stone, we held that the 'critical fact' we must look to in determining whether the border search exception applies is 'whether or not a border crossing has occurred,'—not the point of origin of the defendant's journey." Stone itself involved a plane that "was intercepted flying low from international airspace toward Florida," before landing at Orlando International Airport. Stone rejected the defendant's argument that the border search doctrine did not apply to the subsequent search because the Government failed to show that the plane "'left foreign land.'"

Pickett tried to distinguish Stone on the ground that ICE agents knew where he was coming from. Doesn't matter: "Stone holds that defendant's point of origin is irrelevant to the constitutionality of a border search so long as a border crossing has occurred." The same holds true even if the trip originated domestically.

And even if the production site was a federal enclave by virtue of the OCSLA (an issue the majority doesn't resolve), the border search doctrine still applies because Pickett crossed international waters on the way. Pickett cited authority from the Eleventh Circuit—United States v. Garcia, 672 F.2d 1349 (1982)—suggesting that the doctrine would not apply to an airplane flying over international waters between two domestic points (because of the low likelihood of picking up contraband during the flight). Not the same, says the majority, "because it is not difficult to imagine picking up contraband while crossing open waters."

Judge Clement concurred in the judgment only. She would not have reached the Fourth Amendment question because, in her view, the production site was not an "OCSLA situs" and was in international waters. Moreover, the Fourth Amendment question

is an issue of first impression in this circuit and is not an easy one. Two circuits have considered a similar question and have concluded that the point of origin does matter in determining whether there has been a border crossing for purposes of the drug importation statute. [cites] The per curiam opinion's holding is not only unnecessary, but creates a circuit split. The defendant's argument on appeal rests on the assertion that CM15 is an OCSLA situs. That assertion is untenable. The doctrine of constitutional avoidance suggests that we should decide the case on the well-traversed ground of our OCSLA precedents, and leave the difficult constitutional question for another day when it is squarely before us.

Court May Deny Third Acceptance Point, Even if Government Moves for It

Post-PROTECT Act, a government motion is a necessary condition for the third acceptance point under guideline §3E1.1(b). But it is sufficient? No.

Williamson went to trial on a 50+ gram crack charge a few years ago. He was convicted. On appeal, the Fifth Circuit reversed his conviction due to a Batson violation during jury selection. On remand, he pleaded guilty—with an agreement—to a one-count superseding information charging him with PWID 5+ grams of crack. The government also filed a motion for the third acceptance point. But the PSR only gave Williamson 2 points for acceptance. The district court adopted the PSR, over Williamson's objection.

On appeal, Williamson argued that "§ 3E1.1(b) . . . does not give the district court independent authority to conclude that hte reduction is unwarranted where the government has filed a motion asking for it." In support, Williamson pointed to the text of § 3E1.1(b) itself, as well as an application note, that make clear that a government motion is a precondition to the third point. According to Williamson, "[those] passages . . . make it plain that it is the government that determines whether a defendant warrants an additional oine-point reduction and that upon a motion stating such, the court has no choice but to grant it."

Not so, said the court. The reasons:

While it's true that the guideline requires a government motion, "there is no additional language precluding a role for the court in determining whether the plea 'thereby permitt[ed] the government to avoid preparing for trial and permitt[ed] the government and the court to allocate their resources efficiently.'"

Although the commentary states that "'the Government is in the best position to determine whether the defendant has assisted authorities . . . ,'" that's only by way of explaining why the motion is required.

Another comment explains that the "'sentencing judge is in a unique position to evaluate a defendant's acceptance of responsibility.'" That comment does not, by its terms, limit its reach to only the initial 2-point determination.

An unpublished Fifth Circuit decision held as such. A Second Circuit case suggests the same thing [although Williamson appears to be reading too much into it]. And the Eighth Circuit has remanded a case for "'"content specific" findings regarding the one-level acceptance of responsibility,' suggesting that the sentencing court has a role in determining whether the § 3E1.1(b) criteria are met."

Thus, both the government and the court must agree that the third point is warranted.

Williamson also argued that, even if the district court can deny the third point, it was error to do so here.

The [district] court overruled Williamson’s objection to the PSR, finding that (1) his guilty plea did not significantly assist the government, because it would not have taken many resources to prepare for a retrial; (2) he did not timely notify the government of his intent to plead guilty, because the case initially went to trial; and (3) he did not use the court’s resources efficiently.

Not error, says the court of appeals. The district court may consider the fact that Williamson decided on a trial the first go-round, and pleaded guilty only after getting a second bite at the apple. Plus, the court had to expend resources on the first trial, so it had a basis for finding awarding the third point would not comport with §3E1.1(b)'s efficiency rationale.

Programming Note

I am in the middle of preparing a Fifth Circuit case update for a CLE presentation in September. While doing that, I'm going to be posting summaries of some important cases that I neglected to mention at the time they came out. So if you're wondering why I'm blogging cases that are weeks or months old, that's why.

Restitution Order Based on Taxes Owed Is "Debt Due for Federal Tax" Under Federal Debt Collection Procedures Act & Consumer Credit Protection Act

How much of one's earnings may be garnished to satisfy a restitution order based on a failure to pay federal income taxes? All of them.

Clayton pleaded guilty to three misdemeanor counts of failing to file federal income tax returns for the tax years 1999 through 2001. His tax liability for those three years was $608,727. His sentence included an order that he pay restitution in that amount to the IRS.

As it turns out, Clayton was a retired riverboat pilot with the New Orleans Baton Rouge Steamship Pilots Association (NOBRA). Among other types of payments, "NOBRA . . . owed Clayton monthly payments of between $15,000 and $16,000 for life, which it described as half-pay inactive status benefits."

So after Clayton was shipped off to BOP, the United States obtained a writ of garnishment from the district court, pursuant to the Federal Debt Collection Procedures Act (FDCPA, and not to be confused with that other FDCPA, the Fair Debt Collection Practices Act). It ordered NOBRA to pay to the United States 100% of Clayton's half-pay inactive status benefits, as well as 25% of other payments, to satisfy the restitution order. Clayton appealed the 100% portion of the order.

As a threshold matter, the court had to figure out the standard of review for such an appeal. The answer: abuse of discretion. In this case, the matter was one of statutory interpretation, so that was reviewed de novo.

Onward to the merits . . . .

The United States is authorized to enforce any restitution order imposed as part of a criminal sentence by using its powers under the FDCPA. See 18 U.S.C. § 3664(m)(1)(A) (2006); 18 U.S.C. § 3613(a), (f) (2006); see also United States v. Phillips, 303 F.3d 548, 550–51 (5th Cir. 2002) (explaining the statutory scheme in detail). The FDCPA in turn authorizes the government to garnish property “in which the debtor has a substantial nonexempt interest and which is in the possession, custody, or control of a person other than the debtor, in order to satisfy the judgment.” 28 U.S.C. § 3205(a) (2006). However, the government’s power to collect restitution in general is expressly made subject to the restrictions on garnishment of section 303 of the Consumer Credit Protection Act (“CCPA”), 15 U.S.C. § 1673 (2006). See 18 U.S.C. § 3613(a)(3).

The principal restriction imposed by the CCPA is that garnishment of an individual’s disposable earnings is limited to twenty-five percent of the debtor’s weekly earnings. 15 U.S.C. § 1673(a)(1). Clayton argues that this restriction applies here to limit the garnishment of his half-pay inactive status benefits. The United States contends that 15 U.S.C. § 1673(b)(1)(C) expressly removes the garnishment order obtained here from the protection of the CCPA altogether: that subsection provides that, without qualification or exception, “[t]he restrictions of subsection (a) do not apply in the case of . . . (C) any debt due for any State or Federal tax.” 15 U.S.C. § 1673(b)(1)(C).

The question then becomes whether the restitution order constitutes a debt “due for any Federal tax.” We agree with the government that the unequivocal plain language of 15 U.S.C. § 1673(b)(1)(C) operates to eliminate the twenty-five percent garnishment limit as to this order.

The chain of reasoning is this: "any" is broad, a restitution order is a "debt", and it's "due for any Federal Tax" because it's payable to the IRS and "[o]ther circuits and the United States Tax Court have explained that the payment of criminal restitution based on taxes owed constitutes the payment of tax." And "[w]hile no state or federal court has apparently ever addressed this provision before,'[w]hen the plain language of a statute is unambiguous and does not lead to an absurd result, our inquiry begins and ends with the plain meaning of that language.'"

By the way, if like me you wonder how a riverboat pilot could rack up a $600K tax liability in three years, read this.